‘Between a rock and a harder place'
28 October 2015 2996 Views
Stephen Moss, CEO of Pring.co.uk the UK’s leading property investment search engine, takes a look at the impact of ‘Corbynmania’ on the property market and landlords in particular…
Many landlords are still coming to terms with the Government’s plans to penalise and fine them for offering tenancies to people who have entered the country without the necessary authority.
It seems grossly unfair, in a situation where border controls are ineffectual and hundreds of thousands of people from the Middle East are being displaced across Europe through no fault of their own, that landlords should become the arbiters of who should and who should not, be housed.
To add to landlords concerns, there is speculation and official hints that interest rates are about to rise, throwing as many as one million households into the position where they cannot honour their mortgage obligations. The private letting sector is somehow expected to cope with the consequences of thousands of individuals and families adding to the residential demand pressure, with their returns diminishing as money becomes more expensive to borrow and difficult to access.
In reality ‘higher costs and lower returns’ will be a signal for many private landlords to look for other ways to earn an honest margin on investment. There are plenty of choices out there.
With inflation bubbling along at around zero and the forces of long-term austerity at work - where is the growth to come from?
One could be forgiven for thinking that everything that could possibly conspire to discourage landlords is already happening, but, ‘no’, we now have a swing to the most left-wing party in living memory taking up the opposition benches.
And what do these new disciples of Corbynism advocate? Rent freezes, higher taxation, a general erosion of the forces of capitalism, nationalisation of utilities (with the attendant living cost increases), tougher banking constraints, diverting the national residential construction effort towards the building of subsidised public housing and printing money to pay for it.
To get back to basics, landlords tend to be uncomplicated people. They can see an opportunity to make a fair return on the investment of time and money into the kind of relatively stable, tangible asset that has proved to be a sound proposition for the last 150 years.
They can see the opportunity to make a capital gain from the relentless increase in residential property prices, if they’re patient. They can see the social value of maintaining a ready supply of accommodation in a fluctuating world. The population can seek out rented accommodation as their circumstances change, for family, educational, generational, work or other social reasons.
Landlords are net contributors to the nation’s economy though all sorts of channels; expenditure on construction and repairs, taxation, infrastructure development and creating employment.
Why should it be that the Government of the day seems to think landlords are the social workers, law enforcers, judges and juries of a floating immigrant population which is totally beyond anyone’s control - and the opposition positions private landlords greedy pariahs with deep pockets ready for plundering?
Landlords need to stand up and be counted. They are not balls in a political ping-pong game, putting their money at risk to satisfy the whims of whichever Westminster incumbent is elected. A mass-exodus of small investors from the market would be a national catastrophe.
Landlords are not bargaining counters in the political game, they are providers of some of the most fundamental and important building blocks in the structure of modern society; millions of affordable homes.
They deserve be treated as such, with fairness, equality and respect.
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